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Twitter's CFO just explained why on earth the company put its finance guy in charge of marketing

May 21, 2015, 16:15 IST

When reports emerged earlier this month that Twitter's CFO Anthony Noto may also now be in charge of the marketing department, it was met with a bemused reaction.

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The finance guy? In charge of marketing?

The relationship between marketing and finance is one of the most strained within a company. The marketing department usually wants more budget, while the finance department is generally reluctant to give it over. The CFO wants proof that the money they delegated to marketing last quarter is actually delivering a return for the business, but marketing can take time to have an effect on sales, which leaves marketers fumbling around for other, softer metrics, like awareness, affinity, recall, and social media engagement, to prove the worth of their ads. The CFO doesn't always buy that.

Speaking at the JP Morgan Global Technology, Media, and Telecom conference in New York on Wednesday (Seeking Alpha has published a transcript,) Noto confirmed that he is indeed in charge of the marketing department now.

Noto explained that the board wanted to "elevate the importance of marketing as a key component of everything we do," adding: "Marketing really needs to permeate product, it needs to permeate content, and it needs to permeate media, and it's a really huge opportunity in front of us."

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Twitter already had a marketing team, building out the foundations, but Noto's explanation about his expanded role seems to suggest that Twitter wanted to emphasize that it was starting to take marketing seriously - but perhaps with caution as far as budget is concerned.

Noto explained why its fundamental Twitter starts increasing its focus on marketing: Nearly everybody knows what Twitter is, but barely anyone knows how to use it. This is an existential problem for Twitter: its monthly active user base is slowing, and investors are concerned.

Noto said: "We [have] over 90% aided brand awareness globally ... TwitBird is everywhere. People are very familiar with it, but they're familiar with it in the way others have presented it. The second issue about the great awareness we have is that it hasn't actually translated into users. We've less than 30% penetration of the social, digital mobile market. In fact, if you just take our monthly active users on a quarterly basis and divide it by the largest player in the group, you'll see that it's 30%."

Twitter has tried to combat this problem by changing the user experience: Creating "instant timelines" last year so that new users can get up and running straight away, for example.

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A big Twitter marketing campaign is on the way

But now, at this stage in the company's maturity, Twitter feels it needs a marketing campaign to educate users as to what the service is all about and why people would want to use it.

Noto said Twitter is in the "very early days in our thinking" about whether it will invest on a broadcast ad campaign, and on deciding which types of consumer and geographies it will target.

And, in typical CFO style, Noto said "we will invest appropriately based on the returns and the value we think it can drive over time and we'll do it in a prudent way like we've done everything else."

So we don't know what form it will take yet, but here's the plan, according to Noto:

I think we've a significant opportunity to educate the 75% of people that don't use Twitter that should use Twitter on the value proposition it provides, and consumption-first experience is the way to do that, marketing is the way to do that, [and the] consumption first experience being logged out. So there's not a tax that someone has to pay, or an investment someone needs to make to use Twitter. And converting that mindset from people thinking they have to tweet or they have to contribute to use Twitter, to people thinking it's frictionless, it's easy, the real value proposition is the best real-time content in the world.

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Twitter has actually aired a TV campaign before. Back in 2012 it aired seven 15-second spots during the Pocono 400 NASCAR race, highlighting activity around the race track, such as a driver taking a photo inside his race car and a helmet cam capturing a tire change in the pit lane. The idea was to promote its then-new hashtag pages, which curate all the tweets, photos, and videos around a certain subject.

Here's one of the ads:

NOW WATCH: What It Was Like On The Trading Floor During Twitter's IPO

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